SEC charges NY firm over misleading Barnes & Noble offer

NEW YORK (Reuters) - A little-known New York City investment firm and its owner were charged with fraud on Thursday by the U.S. Securities and Exchange Commission for issuing a misleading press release announcing their offer to buy 51 percent of Barnes & Noble Inc.

A general exterior view of the U.S. Securities and Exchange Commission (SEC) headquarters in Washington, June 24, 2011. REUTERS/Jonathan Ernst

The SEC said the Feb. 21, 2014 statement from G Asset Management LLC and Michael Glickstein misled investors because it did not disclose that G Asset had no ability to raise the $670 million needed to finance the offer.

It also said the release did not say that G Asset intended to profit once the offer became public by selling thousands of Barnes & Noble shares and call options it had recently bought.

Without admitting wrongdoing, G Asset settled with the SEC by giving up $175,000 of ill-gotten gains and interest, while Glickstein, 34, agreed to pay a $100,000 civil fine and accept a five-year securities industry ban.

Neither G Asset nor Glickstein could be reached for comment. A phone number and website for G Asset were no longer active. It was unclear whether the defendants have a lawyer.

G Asset had offered to take control of Barnes & Noble in a transaction valuing its shares at $22 each, roughly a 30 percent premium, making the largest U.S. bookseller worth $1.32 billion.

In June, the SEC accused a Bulgarian man, Nedko Nedev, and others of making thousands of dollars trading in Avon Products Inc and two other companies after making bogus tender offers and press releases public.